Climate and Community: Understanding Environmental Change

Climate finance refers to the financial flows that support mitigation and adaptation activities. This includes funding for renewable energy projects, energy efficiency improvements, and the development of resilient infrastructure. Sources of climate finance include public funds, private investment, and international financial instruments.

Public funds are often allocated through government budgets and can be used to subsidize renewable energy, fund research and development of green technologies, and support adaptation projects. Grants and loans from public financial institutions, such as the UK’s Green Investment Bank, are critical for kickstarting low-carbon projects.

Private investment plays a significant role in financing climate action. This includes investments in sustainable businesses, green bonds, and other financial products that support environmental objectives. There is a growing recognition among investors of the risks associated with climate change, leading to increased interest in sustainable investment opportunities.

International financial instruments include funds set up under the United Nations Framework Convention on Climate Change (UNFCCC), such as the Green Climate Fund, which helps developing countries in their efforts to adapt to climate change and reduce emissions.